Kindred Leaving US Market

US betting apps will take a hit as the Kindred Group recently announced it will be exiting North America by the end of Q2 2024 in a move to reduce costs while focusing on its core markets in Europe. Kindred has struggled in the US online gaming market and made the decision after disappointing Q3 results added to its mounting losses since the start of 2021.

Who is Kindred?

Founded in Sweden as Unibet in 1997, Kindred Group is one of the world’s leading online gaming operators, with nine brands and over 30 million customers across Europe, Australia and North America. It was granted an online gambling license in the UK and Sweden in 1999 and gradually expanded its online betting service to other countries, eventually gaining a license in Malta to service those markets.

By 2002, Unibet had over 200,000 customers in 80 countries. It first entered North America seeking to capitalize on the lucrative US gaming market after partnering with Hard Rock Hotel & Casino Atlantic City, NJ, in 2018, becoming one of the first online betting sites to launch in the state later that year. Unibet is available in New Jersey, Pennsylvania, Indiana, Arizona and Virginia and also boasts one of the leading online casinos. 

Kindred Heads for the Exit

Kindred’s exit and cost reduction endeavor includes cutting 300 jobs, which should save the company about $50 million yearly. After its board of directors decided to “initiate a process to explore strategic alternatives” in April, Kindred stressed that it would consider all options to sustain value for shareholders, which includes the sale of all or part of the company or other strategic dealings.

Unibet handled $43.2 million in wagers in Pennsylvania through October 2023, which was just 0.7% of the $5.8-billion handle in the state. It also failed to gain at least a 1% market share in Virginia, Indiana and Arizona, with a combined handle of about $15.6 million. These were all expected to be competitive markets with enough players to support all active providers in their jurisdictions. However, that hasn’t been the case for several small operators. 

The operator left the Iowa market after the end of 2022 after accepting a $1 million wager from Jim “Mattress Mack” McIngvale on the Houston Astros to win the World Series, which he won. Unable to overcome the $6 million payout, it left the Hawkeye State after paying out almost another $5.05 million with a total sports wagering handle of $5.7 million.

The End of Unibet in the US?

Unibet’s departure from the US adds to the ongoing debate about whether smaller operators can survive in the market. Despite getting an early start in New Jersey and Pennsylvania in 2019, Unibet hasn’t performed as expected, failing to gain market share against the top competitors in the market like FanDuel and DraftKings.

Unibet is the fourth online gaming site to shut down its US operations in the last 18 months, joining Fubo Sportsbook, Maxim Bet and FOX Bet. Pointsbet was also contemplating leaving the US market before its US assets were purchased by Fanatics. Kindred will now focus on its core markets in the UK, France and Scandinavia.

In a statement released by Kindred, interim CEO Nils Andén said, “The cost reduction actions announced today are both necessary and decisive. I am confident that this will create a leaner organization, enhance the Group’s scalability, and improve focus on key growth initiatives.”